never have to deliver. they buy the membership, but they don't actually go and consume the service. i think maybe it makes sense for equinox because they're more of the high-end product, so their the customer is probably going to want to -- jackie: actually, you're paying so much for that membership. yeah. >> maybe they end up pin picking up in february -- jackie: real quick, you made a lose weight resolution this year, i did not. >> i was 206.3 when i got ready for "fox & friends" on sunday, i haven't checked lately, but i feel like i'm losing -- i'm probably down to about 170. i probably lost 30 pounds in 3 days. [laughter] i'm joking. jackie: i definitely did not believe that. okay, james freeman, todd piro, it's been an interesting three hours. thank you so much. "varney & company" is up next. i'm going to send it over to my friend stuart. take it away. stuart: good morning, jackie. good morning, everyone. all right, let's get serious.

three hours from now the fiasco continues. there will be another vote for a new speaker. three ballots failed to elect kevin mccarthy tuesday. he says he'll stay in til he wins. it's stalemate. 200 republicans want mccarthy, 20 do not. my opinion, those holdouts are blackmailing their own party. their demands are incoherent, and the idea that the 20 can convince the 200 to change their vote is, frankly, ridiculous. i get the peeling america is losing -- the feeling america is losing patience. you will get the latest from this program. all right. two big name stocks in the news, not good for east of them. microsoft ache thing a big hit, down nearly 3%. a big investment firm says growth in its cloud business will slow. ubs has downgraded the stock, and it is down, as i said, $7 at 2.99%. apple, not much of a rebound.

languishing around $126 a share this morning. it's valued right around the $2 trillion mark. it was down 4% yesterday. the feeling is that apple's big ticket the products will not do well in a recession. overall, the market showing little change. the dow hit a record high one year ago today. 36,799. today it's at 33,399 3. it's going to be the up about 100 points at the opening bell. s&p slightly higher, nas nasdaq up 67 -- 60. if a recession is coming, we lose less oil, the price goes down. and there's china struggling with surging covid cases. but gas, it keeps going up. 4 cents higher oversight to an average of $3.26 the, and it's up 13 cents in a week. there is only one political story today, and that is the unprecedented gop search for a leader in the house. "the wall street journal" has it right, again in my opinion.

quote, the gop's chaos caucus returns. that is the big story on this wednesday, january the 4, 2023. "varney & company" is about to begin. ♪ ♪ give me one more shot ♪ stuart: did you get that? the one more shot. [laughter] by the rolling stones. i guess that's yet another ballard for the speakership. it is the big story of the day. congressman kevin mccarthy, he came up short on three ballots in his bid for speaker, that was tuesday. the house reconvenes for a fourth vote, 12 noon eastern this morning. lauren's with me. take me through the drama. lauren: where do i begin? you have to go back ament century to see this kind of drama. speaker nominee kevin mccarthy

never made it across the finish line yesterday, so we have the most on the first round, 203 republicans vote for hill. by the second round he's down t. and then down to 20 the 0 by the third round. these 20 republicans voted against him and for jim jordan who wants to run the house jewish dibly committee. congress -- judiciary committee. congressman byron donalds balm vote number 20. >> we were basically deadlocked, and it was pretty clear he didn't have the votes. so my thought is, okay, if he doesn't have the votes, what are we going to do as a conference to find someone who can get to 20218, or at a minimum, get off the floor so that needed negotiations can happen. we're having a deliberative process about house leadership and about what is needed to get washington back on track. stuart: congressman donalds did say wait and see for today's vote to see how he votes. could he change his vote.

that was from congressman donalds this morning on "fox & friends." lauren: but there's also calls for mccarthy to drop out now because this opposition, this group of 20, could possibly make it so a moderate democrat could win with. so should mccarthy drop out. i mean, this is what we're talking about the now when republicans won. stuart: he's not going to, but trump's coming in. what's he got? lauren: he called on house republicans to unite around mccarthy the i saying don't turn a great triumph into a giant and embarrassing defeat. it's time to celebrate. stuart: that's a strong statement from trump right there, and some of the holdouts are, i thought, trump supporters. lauren: like lauren boebert. stuart: yes. matt schlapp is with us this morning. how does the republican party deal with these holdouts, matt? >> yeah, this is the right question. we can all talk about how we got here. i'll just say it's been a slow moving train, stuart.

both paul ryan and john boehner won their initial bid to be the speaker but were both failed speakers and couldn't get the votes to serve more than four years because they didn't deal with this basic question, will republicans in congress fight spending. despite all the coverage that this is somehow a personality conflict -- and it is with a couple of these members -- by and large, the reason why kevin mccarthy has this problem with the conference is that these fiscal keys do not want to follow -- conservatives do not want to follow the senate strategy of what they just did. they passed nearly a $2 trillion omnibus with winks and nods from ea palins because they don't have the stomach to reduce federal spending. and at a time when inflation's out of the bag, this is now a perilous question. will the republican party move from just talking about cutting spending on the campaign trail to actually running an appropriations process where we cut spending. so what kevin mccarthy the

should do right now to try to solve this problem is say, look, as your speaker, we're going to hold spending level, and we're going to fight to make sure that as part of that spending, we're going to close down this border, get rid of the 87,000 irs agents. in 8, 9 months, stuart, the next budget vehicle is coming. he ought to prenegotiate to say i'm going to break with senate republicans who like the pork barrel spending, and i'm going to break it. the second thing he should do, stop raising money and playing in these republican primaries. the other thing that's not being covered in the media is some of these people are opposing him because kevin mccarthy spent money against them in the races. if you do that and you pick the wrong side, that person's never going to support you for leadership. he's got to solve these problems and solve it now. stuart: okay. if you don't get a solution today, i think the republican party is in serious trouble the. would you agree with that? >> i don't. i don't, stuart. i think the republican party is in serious trouble because we

say things on on the campaign trail. everybody supports republicans. one of the main ten innocents is we -- tenets is we will stop the wasteful spending, we will stop obama, we will stop now biden's spending. you know what happens when we all get back here, stuart? there's not too much of in that gets done. it's a lot of lip service is the. you have one of the best shows on fox business, maybe the best. if we don't do something on spending, our economy is going to be in a terrible position. stuart: good stuff the, matt. i'm not going to go against you on any of this, i'm just concerned about the embarrassment to the are republican party. i'm sorry, i'm out of time -- >> me too. this all should have been done a month ago. thanks matt. and then we have sam bankman fried. he says he's not guilty of fraud. when does the trial start? lauren: october 2nd. the next court hearing for him is may 18th.

recap of yesterday, he pleaded not guilty to all federal crimes he's charged with, that's eight. his bail conditions were changed so he can't move around ftx assets anymore, and then we returned -- learned of those two other cosigners who guaranteed his release. in addition to his parents' home, those other two co-signers, they remain anonymous, so we don't know who they are. stuart: my dollar says there'll be a plea deal before the october 2nd trial, but that's just me. what do i know? check futures, please. we're looking to the upside just when the market opens this morning. back comes eddie ghabour. all right, eddie, when are you looking to get back into the market? >> we believe we're going to see some great opportunities in the first half of this year. we think we'll see some opportunities in the first quarter especially as earnings come out. i think you're going to see a lot of revisions to the downside, and we'll start dollar cost averaging in. look, the key is patience. we're sitting on a lot of cash

coming into this year, our highest cash position we've ever had for clients, and we have the luxury of waiting because you're finally getting paid to sit in cash. and here's why we're still so bearish the first half of this year, we haven't seen any bankruptcies yet, and we're going to, in our opinion, because there's a lot of companies that the stock prices are gown 8 -- are down 80 and 90%. when they have to refinance debt this year, their debt is already priced significantly lower than what they'll have to refinance for, and who is going to give credit to a company whose stock price is down 80 or 90%? it's an unfortunate reality that happens anytime you have a bubble burst and go into a recession, but those are the cards that we have been dealt, and we have to be patient because those that are the, i think, are going to have the some amazing opportunities to generate a lot of wealth in the long run. stuart: are you just waiting for the federal reserve to pivot and start to level off interest rates and move them down? is that what you're baiting for? >> i'm -- waiting for? >> i'm not really focusing on

the fed. they've already done enough damage that what we are seeing is going to happen no matter what they do. the fed will only cut rates when things get really, really bad. so if your thesis is the fed is going to pivot, then you actually agree with us that things are going to get much, much more worse from an economic and stock price standpoint. i don't see the fed cutting rates this year. this market has to reset to a new normal of higher interest rates for the foreseeable tush -- future. and again, i stress this, i think this is best for the long term. investors should be able to get paid on cash. the problem is we've been spoiled with low interest rates for so long that it's causing asset prices to get to levels that are not sustainable under a regime of higher rates. the interest rate market we're in now is actually normal, you know? mortgage rates should be at 7%. money markets should be paying 4 and 5%. we've been in this delusional world of zero interest rate, and

that's not healthy. and it's the unfortunate that a lot of people that are still taking a lot of risk are measuring valuations based on zero interest rates. we're not going to see that again, in my opinion, probably in my lifetime. stuart: eddie ghabour holding on to his cash still. eddie, happy new year to you. see you again soon. >> happy new year. stuart: coming up, karine jean-pierre was pressed by peter doocy on whether or not the administration thinks the border is secure. listen to her response. >> this is a president that has been working since day one to work on border security. to make an immigration prior priority. we have republicans, as you know, who are doing political stunts. stuart: that really sounds like she's blaming republicans for the border. it is the biggest story of the day, the house will reconvene at noon after kevin mccarthy failed to win his bid for speaker after three votes. so will the fourth time be the charm? i've got to say i'm skeptical. let's see what florida

congressman michael waltz has to say. he's next. ♪ even the losers get lucky sometimes. ♪ even the losers -- ♪ yeah, they get lucky sometime ♪ it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪ there's no going back. hi, i'm lauren, i lost 67 pounds in 12 months on golo. golo and the release has been phenomenal in my life. it's all natural. it's not something that gives you the jitters.

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♪ that's the only way i know -- ♪ don't stop til everything's go ♪ stuart: that is daytona beach in florida, of course. 72 degrees. looks like a nice day. back to the speaker vote. kevin mccarthy lost his bid for house speaker on all three ballots. that was yesterday. congressman mike waltz, republican from florida, joins me now. this morning donald trump weighed in. he says it's time for all

republican house members to vote for mccarthy. is that going to turn the holdouts around? >> you know, it's certainly helpful, stu. when i hear from people that say that mccarthy's not conservative enough, i remind them that jim jordan has endorsed him, marjorie taylor green has endorsed him, president trump has endorsed hum. and, oh, by the way, we have to have someone that's a conservative leader but also are moderates, many of whom just won in pro-biden districts to get us the majority will also support. so this just can't be a total headlong race to the right when we have to have an entire conference. and by the way, stu, we can't have a situation where 20 members hold 202 members hostage and our agenda hostage. we were elected as well. and this is turning into a blackmail situation. the thing that's so frustrating is we've had dozens of meetings about the things that they want, much of which is actually very good.

for example, we'll have an inflation score on every bill. we're going to have 72 hours' notice so you can't have a $1 is.7 trillion -- 1.7 trillion package crammed down our throats so we can actually a read through the bill, things hay long those lines we've actually begin. but when it comes down to, well, i want this committee or personal agendas or vendettas, that's unacceptable. this isn't about us, this is about the people we represent. and right now they're not opposed -- opposing ken mccarthy -- kevin mccarthy, they're opposing the 202 of us that want to get down to investigations, subpoenas, checks and balance withs on biden now and not, you know, whenever they decide they want to get around to it. stuart: congressman, i just want you to listen to your colleague, dan crenshaw, how he characterizes the republicans who oppose mccarthy. roll that tape the, please. >> you're a narcissist. if you're a narcissist and you believe that your opinion is so much more important than

everyone else's, you keep going. you'll threaten to tear down the team for the benefit of the democrats just because your own sense of self-importance. that's exactly what's happening. they are enemies. they have made it clear that they prefer a democrat agenda can than a republican one. stuart: congressman dan crenshaw says these folks that are holdouts, they are enemies. strong stuff. do you see it like that? >> well, i, you know, i wouldn't say that, stu. many of these folks are my friends, many of them have great points. my frustration with them is though that we've actually given in to those points. we've changed the rules. we do need to reform congress, especially how it's been operating under nancy pelosi. but to dan's point, you should be in the room, stu. the democrats are laughing, they're cackling, you know? i mean, and the thing that makes me so frustrated as a veteran is

not just the democrats laughing, it's the biden administration, it's the chinese communist party, the russians, the north koreans, the iranians who are pointing to democracy and calling it dysfunctional, saying you better side with us and not this form of government. and that, to me, is just galling. stuart: if you don't get an agreement of speaker by the end of today, i think it's a disaster for the republican party. what say you? >> well, look, i mean, i've been hearing from activists, from supporters, from donors saying this isn't what we voted you guys in to office for. and the frustration is through the roof. so i do think past today the it does, it really becomes disastrous. it turns the party into a laughingstock. and it's the not serious. again, we've given in to many of these requests. but when it comes to personal agendas, that's unacceptable. we have to be serious about the agenda of the american people and getting this country back on track and checking and

balance -- blocking the left's agenda to drive us towards socialism. stuart: i will be very interested to see if mr. trump's statement supporting mr. mccarthy has some effect in the ballot -- >> it was huge, stu. i think it was huge, and i'm glad he did it. stuart: yep, got it. congressman, always a pleasure. i know you've got a big day in front of you. you've got a big year in front of you, but thanks for being with us. thank you. >> thank you, stu. stuart: all right. let's take a look at futures. this is, what day is it? it's wednesday morning, isn't it? we're going up, second trading day of 2023. looking like a 100-point gain for the dow. one year ago today the dow hit its all-time record high, 36,799, as i recall. one year ago. now it's 33,372. we'll take you to wall street percent opening bell next. ♪ life in the fast lane will surely make you lose your mind. ♪ life in the fast lane ♪

so it's decided, we'll park even deeper into parking spaces so people think they're open. surprise. [ laughs ] [ horn honks, muffled talking ] -can't hear you, jerry. -sorry. uh, yeah, can we get a system where when someone's bike is in the shop, then we could borrow someone else's? -no! -no! or you can get a quote with america's number-one motorcycle insurer and maybe save some money while you're at it. all in favor of that. [ horn honking ] there's a lot of buttons and knobs in here.

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matching your job description. visit indeed.com/hire hi, i'm eileen. i live in vancouver, washington and i write mystery novels. dogs have been such an important part of my life. i have flinn and a new puppy. as i was writing, i found that i just wasn't as sharp and i new i needed to do something so i started taking prevagen. i realized that i was much more clear and i was remembering the details that i was supposed to. prevagen keeps my brain working right. prevagen. healthier brain. better life. stuart: all right. it is the wednesday morning. we're going up at least at the

opening bell this morning, but we've said that countless times. you have no idea how things are going to change in these volatile times, but right now dow's up 100, nasdaq's up 72. i see green. shah gilani is back. let's get specific here. earnings season kicks off in a couple of weeks. it's going to be crucial for the market. how do you think it's going to go this year? >> i think earnings will probably be somewhat disappointing only because analysts haven't lowered their estimates enough, and i think that as we start to see numbers come in these earnings don't meet or beat consensus estimates, i think the market is going to have a little bit of a hiccup and probably reverse back. it's trying to hold here. you know, today might be a first day of something positive, but there's no momentum behind any upward move. we're sill in a bear -- we're still in a bear market, and if earnings come in much worse than expected, this market will likely see lower lows. stuart: here's what i'm hearing

from a lot of different people: we're heading toward a recession, the federal reserve will at some point stop raising rates as the economy declines, and at that point when they stop raising rates and maybe put rates down, that's when the market rallies. do you see things nowing out like that? flowing out like that? >> no, i see that as the hopeful narrative, but i don't see that happening. the fed is definitely going to sop the raising rates. i say maybe two more meetings heir going to pause. they've talked about the lag, allowing economic conditions to catch up to where rates have gone to. and if, indeed, inflation does fall somewhat, they may have a better terminal rate than expected. but nonetheless, they've been clear, the fed has been absolutely clear about keeping rates higher for longer. they're not going to pith, and if we -- to pith. and if we -- to pivot. they'd like a soft-landing recession to bring prices down, so they're not going to pivot and start lowering rates. i think investors who think that

are going to be the surprised by a market going lower. and every time it does, stuart, there's so many great stocks that look like they're on sale, it's time to buy them, but they go lower. stuart: so you're not ready to jump back in at any point in the near future, are you? >> i have so much money on the sidelines, i can't wait to jump in. but every time i'm about ready to put a foot in, i pull back, i put my foot in a couple of times on a very small basis, a couple of positions, taking profits quickly because they reverse. so keeping my stops very tight when when i do go into commission in-- anything including energy, but it falls right back. financials, tried to do the same thing, industrials, same thing. everything seems weak enough to not be able to sustain any kind of rally. it's a trader's market, not an investor's market. stuart: are you buying anything? tell me about any stock that you are buying today or this week. >>, so on my list is diamondback

energy. i am very anxious to load up on that stock, but it keeps going lower. so i thought, okay, it's gone up, it's come back down, it's a great opportunity to buy a sock with a tremendous dividend yield, plenty of room to increase the dividend, in energy which i think is going to do well in 2023 if we don't have a recession, but still it goes lower. that's a typical example of a position i would like to get into, but i hesitate. i'd rather buy stocks as they're going up. i'd rather pay up because they're going up, not try to catch the bottom. stuart: for 10 years, shah gilani was the king of dip buying, and now he's not. i know you'll be back soon. thank you, sir. ten seconds to go, and we start the trading day this wednesday, january the 4th, 2023. it's the second trading day of the brand new year. looks like we're going to start to the upside. the clapping's finished, the balloons are coming down, and we're off and running. i see ge health care celebrating

at the nasdaq. we've opened trading. the dow is up 100 points. the large majority of the dow 30 stocks are very much mt. green. let's see how we go from here, all right. the s&p 500, where's that this morning? up one-half percentage point. the nasdaq composite, where is that this morningsome up three-quarters of 1%. show me big tech. all of them on the board, they're all good except for microsoft -- susan: i'll get to that in just a bit. stuart: yeah, we must get to that. susan: of course. stuart: i want to start with apple. market cap below $2 trillion the. dan ives has cut his price target from 200 to 175. that's a tough start to the year. susan: well, 175 is pretty much the average we're seeing for analyst calls across the board. so the stock,st still trading above its average the past decade, and that's despite hitting its lowest in 18 months plus, right? they were down 12% in december

alone, biggest monthly drop for the world's biggest company since may 2019. and as i mentioned to you, the average price target the still a consensus buy on wall street. the average price target, 173, that's pretty good upside if it actually happens. and the reason why the stock is up, you heard from jpmorgan, and they're saying that iphone sales were up in november from october, and they're even up from the prelaunch levels. china production back up to 90% capacity. sure, smartphone sales are down in china by 34% in november, but that's because of the covid lockdowns and the disruptions we've seen. this might be a delayed demand story which a lot of people are buying into. stuart: what have you got on meant that? susan: -- meta. i feel like this is the con consensus buy and recovery story in 2023. meta platforms. stuart that's the big tech stock to buy? susan: correct. as you mow, the ones that the underperform the year before

usually outperform the year after. steeple naming it one of their top picks. dan niles, he says it's one of his top five stock picks that he's buying this year. stuart: all right. let's get to -- susan: the big one, yes. stuart: i know that ubs has downgraded them, down 4% almost. what's the problem? susan: well, they're calling it a neutral. they're saying hold it, it's worth 250 still, and that's because of the boom they sue in cloud during the remote work trend might be done at least for the time being, right? microsoft is investing in autonomous trucks. they're investing $10 billion into a california-based self-ing driving truck. it's been tricky, $100 billion, little to show for it because we haven't seen any if autonomous cars or trucks on the road just yet. i i think microsoft is doing the smart thing.

outperformed so far among the big tech companies. they're only down 20% whereas everybody else is down a lot more than that. but they're one of the main investors in open a.i., have you heard of that? stuart: yes, i have. susan: supposed to be the new terminator type of artificial intelligence, type of product that you're -- you look shocked. stuart: well, microsoft is down $9, 3.8%. susan: they're investing in the future. they're aching this opportunity the, they have -- taking this opportunity. they have 100 billion on the balance sheet, they're spending some of that but doing the smart thing by investing in the future. stuart: down 4%. tesla, they were down 12% yesterday, first trading day of the year. i'm going to bring up dan ives again. he's optimistic on tesla still, isn't he? susan: also cathie wood as well, she bought another $19 million last night, six sessions in a row, that's $100 million plus over the past three months.

lowest, by the way, since august 2020 for the stock. it was just $4 away from cracking 100, sub-100 yesterday. i thought would -- buy in at less than $100 maybe. they lost, they've lost over a trillion dollars almost in value, down 75%. you've lost $900 billion. but i'll tell you retail investors, you know, elon musk is, shall we say, the idol of a lot of these retail the investors. they're still buying $175 million buying on the dip yesterday. stuart: i've got to say that cathie wood has real guts. she believes in it, and she keeps buying it. stuart: susan: there's vested interest, as you know, because she made her name by calling 4,000 for tesla stock by 2026. stuart: i wonder if she's attracting any money. susan: she's lost $400 million from outflows, and she's down

65% over last year. stuart: salesforce, i know the stock's up nicely, they're cutting a lot of jobs. susan: 10%. they employ around 73,000 around the world, so 10% of that, you do the math, and they're closing some offices as well. they're expecting to move maybe to -- they say lit cost them about $1.5-2 the billion in charges. but let me ask you this, you heard from from marc benioff who committed that he overhired during the -- 2k3w4eu79ed that he overhired during the pandemic boom. the slowest revenue growth in the company's history, you've lost two ceos in the past three years. you have tough competition from if aws and microsoft azure, and you're not making that much of a catch-up. so i think there's a rethink on this stock and where the company should be. stuart that's the lousiest chart i've seen for a long time. straight down. susan: there you go. stuart: i'm looking at general electric, your granddad's stock.

general electric is up, what is it, up 2 the % this morning -- susan: i the we need to -- i think we need to look at ge health care which was just ringing the bell. as you know, ge health care is part of the break-up of your granddad's stock, as you mentioned, right? it's split into three companies, ge health care is one of them, and it's the spin 5u6. i -- spin-off. i think it's a smart way to make sure you're getting the right value for the right segment. stuart: got it. susan, thank you very much. right after the midterms, jason chaffetz joined this program, and he made this prediction about mccarthy's speakership bid. roll that tape. >> it's scrambled eggs, runny scrambled eggs at this point. i don't know that anybody's necessarily going to buy that. it's a real toss-up. i don't know that he necessarily gets to the finish line. very uncertain at this point. stuart: chaffetz was right, and he's back on the show today. i'm going to ask him if he thinks mccarthy will finally get what mccarthy wants on the

show later. and there's this: inflation appears to be falling, but does it go back up again with the trillions of dollars of congressional spending that's coming up? john lonski's here to take it on right after this. ♪ set me free, why don't ya, babe? ♪ get out my life, why don't ya, babesome. ♪ you claim you still care for me, but your heart and soul needs to be free ♪ get refunds.com powered by innovation refunds can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars

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stuart: president biden heads to kentucky today to tout the benefits of his massive spending spree. edward lawrence at the white house. all right, edward, i find this extraordinary because mitch mcconnell is going to kentucky with president biden. they're going to appear together. is that right? >> reporter: yeah, very interesting, they're going to appear today. d -- together. but mitch mcconnell will not be on air portion one, he will already be in kentucky for this. the president going there the to

tout his infrastructure spending bill and the spending that he's coming through that, senator mitch mcconnell wanted to be there according to fox news because his folks are telling fox news, i should say, he wants to be there because $1.6 billion in federal funding that he has secured through the bipartisan infrastructure bill that he got for a specific bridge in kentucky that they are all going to be at. the white house pushing the fact that the president's spending policies have worked whether for climate change or inflation or his energy policies where the president has regular unleaded now jumping again for the eighth day in a row, 4 cents overnight on gas. the white house blaming it on refineries closing because of cold weather before christmas. >> we have made significant progress in lowering the prices, gas prices specifically. prices are down nearly $2 per gallon and are lower today the than they were one year ago -- >> reporter: once these refineries come back online, do

you expect the price to come back down? and the price of gas when the president came into office was $2.39 a gallon. >> i know, but i'm talking about one year ago. that was not when he came into office. >> reporter: gas prices still inching up. the ex-fedhead alan greenspan now also saying there'll be a recession this year. of if you believe the vast majority of economists at the biggest banks in america, they also say recession this year. so all the government spending going on, that's not going to stop the slowdown, apparently, that's about to come. stu. stuart: edward lawrence at the white house, thank you. john lonski is sitting next to me in new york city. john, i want to talk about inflation. it seems to me that inflation is beginning to cool. i think we've got good evidence of that. but what happens when we get all this federal spending, trillions and trillions coming out being spent many our economy? could inflation go back up again? >> i don't think so. that's largely because of the expected recession. nevertheless, the fact that we

have all this spending means that inflation will be higher than otherwise. as a result, interest rates will be higher than otherwise and sectors like housing will suffer. you know, you always complain about the two-handed economy. on the one hand this, on the other hand, that. i want to complain about two-handed leadership in washington. we have the fed earnestly engaged in a fight against inflation. on the other hand, we have the executive branch and perhaps some in congress supporting inflation with this spending bill. there's no question about that. inflation is higher than otherwise because we plan to increase discretionary spending by 8.8% fiscal year 2023. and i want to add to that. that planned 8.8% increase is well above the projected 4.8% increase for the gdp price index deflater. this real terms that's 4% growth. my goodness, when you're trying

to bring inflation lower, you don't add to fiscal stimulus. stuart: you do if you're a politician the, because you want to say -- [laughter] look what i'm doing for you. >> right. and if it's not blaming -- working, you blame it on the fed. stuart: that's exactly what's happening here. tell me about housing. it's on a downturn, obviously. is it speeding up? >> i think it is. things are going to get worse for housing. the problem is twofold; price are too high so they're probably going to go lower, and mortgage yields are too high. we're not going to be able to stabilize housing until we get that 10-year treasury yield under 3%. i might add 2017, 2019 relative stability housing. we had mild home price appreciation. home prices, that's bad news. they have now declined for four consecutive months. that decline will be extended. you know, ultimately, we're going to find that home prices will be under the peak of mid near 2022 by 10-15%.

stuart: 10-15% below median price high of 2022 -- >> yeah. june of 20 to 22. stuart: and when will we get the 10-year treasury yield below 3%? it's at 4 something or other right now. >> don't hold your brent. maybe -- your breath. maybe the recession will push it under sometime in 2024. by the way, if i'm a democrat, i want this recession now. i don't want to risk having the recession carry over into 2024, an election year. stuart: well, you're not a politician, you're an economist, and we appreciate that. lonski, thank you very much, indeed, sir. >> my pleasure. stuart: another new poll, here it is. it shows people are not hopeful about 2023 and how it's going to play out. main concerns? lauren: these numbers are horrible. the main concern, this is from gallup, is the political conflicts that we're seeing in washington. 90% say they expect that to continue. the d.c. drama does affect the

main street economy. check this out, 81% i say higher taxes this year, that adds insult to injury because gallup also finds more than 6 in 10 of us say prices continue to go up as the stock market continues to go down. that's terrible. one more thing to really just rub it in here, 799 % believe economic -- 79% believe economic hardship continues, so a very pessimistic outlook. stuart: that's very negative. stuart: like most people are saying the recession in the paris if half, but can we have this more upbeat environment in the second half? stuart: that's been shot down a couple of times inspect program in the first 47 minutes of this program, but there you go. three states now require salary information on job boastings -- postings. all right, which three states and what's the impact? lauren: california, washington and it is the rhode island, and they're required by law to tell prospective employees what they will be paid. california goes like this --

[inaudible] they also have to break it down by race, ethnicity and gender. stuart: what? lauren: okay? so everybody knows everything. the job platform, indeed. they say 7 in 10 companies post salary ranges because that's what employees want. transparency, right? i do, i want to know what everybody else gets paid, right? stuart: oh, you do? lauren: of course, why not? i then have bargaining power. i should make that too. no, because when the bosses find out if they're going to give you a raise and i find out about it, i'm going to demand one too. stuart: i should have never gotten into this. lonski's laughing. lauren: my point is, if everyone finds out that you gave one employee who you really want to retain and promote, everyone else is going to know. stuart i don't think -- can there's nothing wrong with giving somebody who you really want a bit more money than someone who you don't want. lauren: correct. stuart: is there something wrong with that? lauren: no. stuart: okay, moving on --

[laughter] democrats seem to be turning on the white house over the border crisis. watch this. >> -- can real embarrassment, i believe, on the national level, and we must have an appropriate response. this is a national issue and must have a national response. stuart: that's interesting. that is a democrat politician in new york criticizing the democrat administration in washington, d.c. can. we'll have more on that for you. more than 16,000 southwest flights cab selled over the -- canceled over the holidays, you know that. the airline's now facing what may become a class action lawsuit. is this just the start of more lawsuits to come? a full report on that next. ♪ oh, i want to get away, i want to fly away. ♪ yeah, yeah, yeah ♪

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stuart: southwest airlines facing a lawsuit. one passenger was not provided with a refund during the airline's meltdown. this may become a class action suit. grady trim are the bl joins us. how much is this person looking for, grady? >> reporter: stu, there's no specific dollar amount listed in this lawsuit, but essentially what he's asking for is a refund for the canceled flight and reimbursement for any of the costs associated with that

cancellation. meanwhile this week, southwest ceo bob jordan is once again offering an apology to passengers as well as frequent flier points equivalent to about $300 to those who were affected by the travel chaos. but with around 16,000 flights canceled over the holiday week, you can bet already still a lot of unhappy customers and more lawsuits on the way. attorney the mark lanier, who's take a on -- can taken on companies like google, johnson & johnson and others, tells me he's looking at filing a suit in dallas where southwest is headquartered next week. >> i think they're going to need to do better than offer bonus travel the points so people can just hop on another southwest airlines flight. they need -- if people paid cash money for these tickets, they need to reimburse them, and they need to do it immediately. >> reporter: for its part, southwest isn't responding directly to the lawsuit that's been filed, but it says we have a long and proud 51-year history

of delivering on our customers' expectations, and we're committed to the all-important imperative of taking care of them during operational disruptions. the airline has also created a web site to process refunds and reimbursements. all told, bank of america summits that this the debacle -- can estimates that this debacle could cost the airline $700 million in lost revenue as well as those refunds and reimbursements. stu? stuart: we're talking serious money, i think. leave it at that. grady, thank you very much, indeed. back to the markets, i see green across the board. not a lot of it, but enough. dow's up 100, nasdaq's up 46. microsoft now down over $10, 4.3%. reportedly, there's trouble with the future of their cloud business. that loss to microsoft is shaving 71 points off the dow industrials. still ahead, ronn amc

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